Share of each educational attainment group experiencing minimum wage violations Older workers (age 55 to 85) experience violations at a lower rate than young workers, but still account for about 16 percent of all workers suffering minimum wage violations. wage theft 2.7% 1.8% 5585 $69 Raising the Minimum Wage to $12 by 2020 Would Lift Wages for 35 Million American Workers. 19.3% With this information, we can identify minimum wage violations by comparing respondents reported hourly wage against the state minimum wage that was in effect in the month they were surveyed. 2014. 78.8% This is likely because the agriculture workforce is predominantly nonwhite and immigrant, with lower levels of educationall factors that correlate with higher rates of wage theft. $216 Our findings provide a better assessment of minimum wage violations than previous studies that have only considered violations of the federal minimum wage. window.chartinfo = window.chartinfo || {};chartinfo[125344] = {"id":"125344","title":"Shares by gender of workers experiencing minimum wage violations","type":"bar","yAxisTitle":"","yAxisMin":"","yAxisMax":"100","yAxis2Title":"","yAxis2Min":"","yAxis2Max":"","yAxisVisibility":"hide","yAxis2Visibility":"","xAxis":[{"xAxisTitle":"","xAxisMultipleTitles":false,"xAxisUnits":"","plotBands":"","xAxisPlotBands":"","visibility":"show","type":""}],"legend":{"position":"outside-top","enabled":true,"title":{"text":null},"align":"center","verticalAlign":"top","floating":false,"defaultOffset":{"x":{"left":60,"right":-50},"y":{"top":5,"bottom":-40}},"layout":"horizontal","orderBy":""},"showDataLabels":"show","showFirstDataLabel":null,"showLastDataLabel":null,"decimalPlaces":"","height":"","heightAdjustment":"80","epiCharts":{"showScatterLabels":false,"showScatterMarkers":true,"showRegressionLine":"","showRegressionEquation":"","regressionLabel":"","regressionSlope":"","regressionIntercept":""},"plotOptions":{"bar":{"stacking":"normal"}}} Download dataThe data below can be saved or copied directly into Excel. 2554 This represents just over 4 percent of all eligible workers in these states. State employees in one agency will split more than $13 million to settle allegations of wage theft dating back to Accessed March 23, 2017. It is noteworthy that in all three of these statesTexas, Pennsylvania, and North Carolinathe binding minimum wage is the federal minimum wage of $7.25. 2023 Economic Policy Institute 2017. window.chartinfo = window.chartinfo || {};chartinfo[125600] = {"id":"125600","title":"Industries of workers experiencing minimum wage violations","type":"pie","yAxisTitle":"","yAxisMin":"","yAxisMax":"","yAxis2Title":"","yAxis2Min":"","yAxis2Max":"","yAxisVisibility":"show","yAxis2Visibility":"","xAxis":[{"xAxisTitle":"","xAxisMultipleTitles":false,"xAxisUnits":"","plotBands":"","xAxisPlotBands":"","visibility":"show","type":""}],"legend":{"position":"hidden","enabled":false,"title":{"text":null},"defaultOffset":{"x":{"left":60,"right":-50},"y":{"top":5,"bottom":-40}},"layout":"vertical","orderBy":""},"showDataLabels":"hide","showFirstDataLabel":null,"showLastDataLabel":null,"decimalPlaces":"1","height":"","heightAdjustment":"","epiCharts":{"showScatterLabels":false,"showScatterMarkers":true,"showRegressionLine":"","showRegressionEquation":"","regressionLabel":"","regressionSlope":"","regressionIntercept":""},"plotOptions":{"pie":{"stacking":"normal"}}}ChartData Download dataThe data below can be saved or copied directly into Excel. Young workers account for nearly one-third of workers experiencing minimum wage violations. Workers experiencing minimum wage violations Whenever any group of workers can be exploited and paid artificially low wages, it lowers the wages of similarly skilled workers and other workers in the same industryregardless of those workers nativity (Costa, Cooper, and Shierholz 2014). As explained in the body of the report, not all workers are eligible for the minimum wage. EPIs research helps policymakers, opinion leaders, advocates, journalists, and the public understand the bread-and-butter issues affecting ordinary Americans. Minimum wage violations occur when employees are paid less than the federal, state, or local minimum wage, depending on which is highest and covers the employee in question. 32.7% Note: For a more detailed breakdown of family income categories, see Appendix Table A3. The total underpayment of wages to these workers amounts to over $8 billion annually. Kimball, Will, and Lawrence Mishel. 2016. Our findings, thus, seem to corroborate Galvins conclusion that the strength of a states labor laws and its enforcement capacity do have a significant impact on the likelihood that employers will commit wage theft. Assessing the full impact of all forms of wage theft is exceedingly difficult. Weil, David. Carr (2015) notes that numerous studies find that 10 to 20 percent of employers have misclassified a worker as an independent contractor. (Gordon et al. Numbers may not add due to rounding. Dec 13, 2022, 2:00 AM PST A Walmart store. Average weekly wages received by workers experiencing minimum wage violations The amount of wages stolen falls by 16.5 percent on an hourly basis and 25 percent on a weekly or annual basis. 8.6% Unmarried, no kids In fact, more than half of all workers suffering minimum wage violations are prime-age workers (age 25 to 54). See Mishel et al. 9/28/2022: 3857-21: Angel Heart Home Care, LLC An Angel Heart Home Care, LLC and Brittany Alshawy and Huda Alshawy: $850.00: $500.00: $500.00: 825 N Circle Dr. Ste 203 An investigation by The Charlotte Observer noted that during the commissioners 15-year tenure, her office sued companies for failing to pay wages only 35 times, an average of less than 2.5 times a year (Locke 2015). Tipped workers are supposed to report their base wage before tips in response to one survey question and their total weekly earnings, inclusive of OTBC, in a second. Total minimum-wage-eligible workforce Industrial Welfare Commission (IWC). 13.4% Married, no kids Economic Policy Institute Briefing Paper no. Galvin, Daniel. YALE LAW & POLICY REVIEW Sellekaerts, Brigitte, and Stephen Welch. Ten states have no investigatory capacity; seven of these use the federal minimum wage. $71 2009. The overall violation rate among native-born citizens is 3.8 percent, and the rate for naturalized citizens is 4.1 percent. Table 2 also shows that many of these workers are in poverty as a direct result of their employers stealing from them. As shown in Figure H, unmarried workerswith and without childrenare more likely to experience minimum wage violations than married workers. Tipped workers are especially prone to suffer wage theft because of their separate treatment under the law. Some college Noncitizens are significantly more likely to experience minimum wage violations than either U.S.-born or naturalized citizens: 6.5 percent report being paid below the minimum wage. Nevertheless, the findings in this reportand similar previous studiesindicate that even when examining only one form of possible wage theft, the magnitude of the crime being committed against American workers is huge. $70 Like ERG, we use data from the Current Population Survey Outgoing Rotation Group to identify workers whose reported weekly earnings and weekly hours of work equate to an hourly wage below the binding minimum wage in their state. It should also be noted that these estimates were produced by calculating the difference between the effective minimum wage and workers reported hourly wage. Occupational Employment and Wages in Columbia May 2022. Mayor Bowser Announces Minimum Wage Increase Effective July Married, no kids Download image, Share of each work hours group experiencing minimum wage violations Download image, Share of each racial/ethnic group experiencing minimum wage violations Phone: 202-775-8810 epi@epi.org Share of workforce demographic experiencing minimum wage violations Wage 3.5% Wage theft has reached pandemic proportions, so why hasn't the Locke, Mandy. Although California does have some exemptions to the minimum wagesuch as door-to-door salespeople and individuals who are the parent, spouse, or child of the employerthey are very limited and most cannot be identified in the CPS data. window.chartinfo = window.chartinfo || {};chartinfo[125590] = {"id":"125590","title":"Share of each work hours group experiencing minimum wage violations","type":"bar","yAxisTitle":"","yAxisMin":"","yAxisMax":"","yAxis2Title":"","yAxis2Min":"","yAxis2Max":"","yAxisVisibility":"hide","yAxis2Visibility":"","xAxis":[{"xAxisTitle":"","xAxisMultipleTitles":false,"xAxisUnits":"","plotBands":"","xAxisPlotBands":"","visibility":"show","type":""}],"legend":{"position":"hidden","enabled":false,"title":{"text":null},"defaultOffset":{"x":{"left":60,"right":-50},"y":{"top":5,"bottom":-40}},"layout":"","orderBy":""},"showDataLabels":"show","showFirstDataLabel":null,"showLastDataLabel":null,"decimalPlaces":"1","height":"","heightAdjustment":"10","epiCharts":{"showScatterLabels":false,"showScatterMarkers":true,"showRegressionLine":"","showRegressionEquation":"","regressionLabel":"","regressionSlope":"","regressionIntercept":""},"plotOptions":{"bar":{"stacking":null}}} Download dataThe data below can be saved or copied directly into Excel. In the 10 most populous states in the country, each year 2.4 million workers covered by state or federal minimum wage laws report being paid less than the applicable minimum wage in their stateapproximately 17 percent of the eligible low-wage workforce. (8) A Department of Labor study of wage theft in California and New York found that wage theft deprived workers of 37 percent to 49 percent of their income, pushing at least 15,000 families below the poverty line and driving another Assuming no change in work hours, if these workers were paid the full wages to which they are entitled, less than 15 percent would be in poverty. window.chartinfo = window.chartinfo || {};chartinfo[125345] = {"id":"125345","title":"Shares of men and women experiencing minimum wage violations","type":"bar","yAxisTitle":"","yAxisMin":"","yAxisMax":"","yAxis2Title":"","yAxis2Min":"","yAxis2Max":"","yAxisVisibility":"hide","yAxis2Visibility":"","xAxis":[{"xAxisTitle":"","xAxisMultipleTitles":false,"xAxisUnits":"","plotBands":"","xAxisPlotBands":"","visibility":"show","type":""}],"legend":{"position":"hidden","enabled":false,"title":{"text":null},"defaultOffset":{"x":{"left":60,"right":-50},"y":{"top":5,"bottom":-40}},"layout":"","orderBy":""},"showDataLabels":"show","showFirstDataLabel":null,"showLastDataLabel":null,"decimalPlaces":"1","height":"","heightAdjustment":"10","epiCharts":{"showScatterLabels":false,"showScatterMarkers":true,"showRegressionLine":"","showRegressionEquation":"","regressionLabel":"","regressionSlope":"","regressionIntercept":""},"plotOptions":{"bar":{"stacking":null}}} Download dataThe data below can be saved or copied directly into Excel. In other words, women are paid less to begin with and thus are left even worse off after their wages are stolen. Naturalized U.S. citizen Wage theft is shockingly common. 2014. (2009) or Gordon et al. Before joining EPI in 2016, Kroeger conducted research at the American Institutes for Research and the Center for Economic and Policy Research. Numbers may not add due to rounding. Black-White Wage Gaps Expand with Rising Wage Inequality. It is scheduled to rise to $15 per hour on January 1, 2022. The ability of employers to steal earned wages from their employeeslargely with impunityis but one more factor that has kept a generation of American workers from achieving greater improvements in their standard of living. Wage Theft Prevention and Wage Recovery Act of 2022. 18.6% Employers that commit wage theft have artificially lower labor costs and thus may be able to undercut competitors who follow the law. For example, the law specifically excludes a variety of specific occupations from the minimum wage, such as newspaper delivery workers, seasonal farm workers, workers in commercial fisheries and canneries, private investigators, and telephone switchboard operators. Where possible, we have taken the more conservative approach in our estimates, particularly in how we handle exemptions and how we construct hourly wage values for non-hourly workers. $189 Report no. But during the survey period, Californias minimum wage was $8.00 per hour through June of 2014 and then $9.00 per hour from July 2014 through December 2015. 3.2% White FY 2017 Congressional Budget Justification: Wage and Hour Division. 2, 333350. Federal Bureau of Investigation (FBI). National Employment Law Project (NELP). Figure D shows that young workers (age 16 to 24) are three times as likely to be paid below the minimum wage as older workers. Early Childhood Poverty and Adult Attainment, Behavior and Health. Paper presented at the Conference on Health and Attainment over the Lifecourse: Reciprocal Influences from Before Birth to Old Age, Chicago, May 16, 2008. For hourly workers that do not report receiving any OTBC, we use their reported hourly wage. With such low levels of income, it is unsurprising that many of the workers who suffer minimum wage violations must rely on public assistance programs to make ends meet. If these workers are employed 52 weeks per year, they lose $3,600 on average each year. Lawmakers who care about the long-term economic health of American households and the ability of ordinary working people to get ahead should be paying more attention to whether those workers are actually being paid all the wages they have earned. Average nominal wage per month in Belarus 2000-2021. 3. When employers can exploit millions of people, it harms an even larger group, because it puts downward pressure on wages for similarly skilled workers and others in the same industries. This report looks closely at one form of wage theftminimum wage violationsand quantifies the impact of these violations on workers in the 10 most populous U.S. states: California, Florida, Georgia, Illinois, Michigan, New York, North Carolina, Ohio, Pennsylvania, and Texas. 14. Cooper has been interviewed and cited by numerous local and national media, includingThe New York Times, The Washington Post, The Wall Street Journal,CNBC, andNPR. $173 The data underlying the figure. | Apr 27, 2022 | Wage And Hour When you Sample includes workers age 16 to 85 in North Carolina. Numbers may not add due to rounding. Carr, Franoise. There are more than 300 temp agencies registered with the state, and the bill sponsors say 127,000 workers would be affected by this measure. Leigh, J. Paul. $203 2554 The Current Employment Statistics (CES) program produces detailed industry We find that 3.3 percent report being paid wages below the minimum wagea reduction of 0.8 percentage points from the baseline analysis. 1979. Past research on wage theft has found that the CPS works well for identifying minimum wage violations, although the CPS does have some limitations, which are discussed later in this section. Weil also details how a growing share of the workforce today are classified as independent contractorsand thereby not covered by the FLSAdespite the fact that these workers perform tasks traditionally done via direct employment. $204 17 Employee Theft Statistics You Don't Want to Miss in 2023 Download image. The statistics in this report are averages for 2013 through 2015, thus presenting the most recent estimates of wage theft in the United States.9, In the 10 most populous states in the country, 2.4 million minimum-wage-eligible workers report being paid less than the applicable minimum wage in their state. 2.8% Total minimum-wage-eligible workforce Why give to EPI 1.7% 1981. 2015. 2009; ERG 2014). Workers with less education are more likely to experience minimum wage violations than workers with a bachelors degree or higher. Note:Weekly amount paid represents the average weekly wages received by workers experiencing minimum wage violations. Men lose an average of $64 per week from minimum wage violations, totaling $3.6 billion annually. State and federal violation records undoubtedly understate the true severity of the problem because most wage theft goes unreported and enforcement is under-resourced. The amount of annual wages lost to minimum wage violations for nonwhite workers totals $4 billion per year. In this section, we describe the results of a series of sensitivity tests we performed, similar to those in ERG (2014), to assess how measurement error may be influencing our findings. U.S.-born citizen Table 23: Offense Analysis. 2015 Crime in the United States. Appendix Table A3 shows the full demographic and wage statistics for the minimum-wage-eligible workforce and workers suffering minimum wage violations in the 10 states studied. Download image. Workers experiencing minimum wage violations Achieving a secure, middle-class lifestyle has become increasingly difficult as hourly pay for most workers has either stagnated or declined. $70 22 Stunning Employee Theft Statistics [2023]: Facts Every First, the ORG data only report hourly wages for those workers that indicate they are paid on an hourly basis. He received his Master of Public Policy degree from Georgetown University. 47.1% 2016. The New Overtime Rule Will Directly Benefit 12.5 Million Working People: Who They Are and Where They Live. Employers in Pennsylvania who commit wage theft are stealing, on average, 34.6 percent of the wages earned by victim employees. Criminal Justice Information Services Division. Although some respondents do report working more than 40 hours in a week, it is not possible to easily disaggregate wages paid at their regular hourly rate from wages potentially paid at an overtime premium rate (time-and-a-half). Gordon, Colin, Matthew Glasson, Jennifer Sherer, and Robin Clark-Bennett. Wage theft law (June 2019) Employee notice. Press. Of the roughly 67.3 million workers in these 10 states, we estimate that 71.7 percent are covered under the FLSA, 84.8 percent are covered under state minimum wage laws, and 87.6 percent are covered under either the FLSA or state minimum wage laws. Florida Department of Economic Opportunity (Florida DEO). The statements made and views expressed are solely the responsibility of the authors. Sample includes workers age 16 to 85 in Ohio. Note:Full-year annual wages are calculated by multiplying weekly wages by 52 weeks per year. 29.2% 2009; ERG 2014; Galvin 2016a). Public Papers of the Presidents of the United States: Franklin D. Roosevelt, 1938. (In)Dependent Contractor Misclassification. Share on Facebook Tweet this chart EmbedCopy the code below to embed this chart on your website. 2017. The data underlying the figure. The lack of sufficient federal investigators is especially problematic for the many workers in states that do not have a state wage and hour office or similar enforcement body. Accurately measuring wage theft is a difficult task. 30+ Wage Theft Statistics: Could You Be a Victim? - legal jobs Economic Policy Institute. (Low-wage minimum-wage-eligible workers includes all minimum-wage-eligible workers in the bottom quintile of wage earners in each state.). 3.0% Mobility: Not Offsetting Growing Inequality. In The State of Working America: 12th Edition, an Economic Policy Institute book. Property crime is a better understood, more tangible form of crime than wage theft, and federal, state, and local governments spend tremendous resources to combat it. Yet to produce such a report, the researchers conducted their own survey of front-line workers in three major metropolitan areas; this survey was specially designed to capture evidence of multiple forms of wage theft. In such arrangements, unscrupulous employersbe it the subcontractor or the contracting parent companywill sometimes use the multilayered or fissured nature of the employer-employee relationship to attempt to avoid responsibility when workers allege mistreatment. We then distribute the weights from these observations to all remaining valid observations. Finally, wage theft has ramifications for the trajectory of wages and incomes for the broad middle class. Download image. We limit our focus to these 10 states so that we can carefully account for each states individual minimum wage policies and state-specific exemptions to wage and hour laws. While federal labor protections have been left to erode, the agency charged with enforcing wage and hour laws has been stretched increasingly thin. Cambridge, MA: Harvard Univ. The CPS-ORG data is widely recognized as the best publicly available source of hourly wage information. What is Wage Theft? | WNT Legal Resources - Working Now and 44.9% The opaqueness of tipped wage laws leaves most tipped workers with little knowledge of their rights and particularly open to abuse. 2014. NJ warehouse temporary worker bill of rights passed by legislature Workers in these states must seek any possible remedy from the federal government or through private litigation. Share on Facebook Tweet this chart EmbedCopy the code below to embed this chart on your website. Hispanic U.S. Department of Labor (U.S. DOL). 5. Workers experiencing minimum wage violations If some of these workers were promised more than the minimum wage, then these figures understate the true value of their lost wages. Many agriculture workersparticularly seasonal agriculture workersare exempt from the minimum wage under federal law and under many state laws.13 Still, those who are subject to the minimum wage have higher rates of minimum wage violations than workers in most other industries. The gender-based wage gap in the United States has narrowed in recent years, but disparities remain: national median earnings for civilians who worked full-time, year-round in the past 12 months was $53,544 for men compared to $43,394 for women, according to the U.S. Census Bureaus 2019 American Community Survey (ACS). 8.0% The vast majority of workers suffering minimum wage violations (86.0 percent) do not have a college degree. When a claim is filed, there is no clear mechanism for updating workers on the status of a claim andwith the exception of the claim formall communication from the agency (including requests for additional necessary documentation) is in English only. (See Kimball and Mishel 2015 and U.S. DOL 2015 for further detail.) 72.3% Employers steal billions from workers paychecks each year, Survey data show millions of workers are paid less than the minimum wage, at significant cost to taxpayers and state economies, In the 10 most populous states, 2.4 million workers lose $8 billion annually to minimum wage violations, Statistics on minimum wage violations in the 10 most populous states, Workers in Texas and Pennsylvania suffer the most when their wages are stolen, Average paid and unpaid weekly wages of workers experiencing minimum wage violations, by state, Far fewer workers would be in poverty if their employers paid them the legal minimum wage, Poverty status of all minimum-wage-eligible workers in the 10 most populous states and of those paid less than the minimum wage, actual and if all workers were paid correctly, Nearly one-third of workers experiencing minimum wage violations receive some form of public assistance, Public assistance usage among minimum-wage-eligible workers and those experiencing minimum wage violations, The majority of workers who experience minimum wage violations come from families of modest means, Family income of workers experiencing minimum wage violations, Workers who experience minimum wage violations are much more likely to work in a service occupation than in any other occupation, Occupations of workers experiencing minimum wage violations, Workers not covered by a union are almost twice as likely to experience minimum wage violations, Share of each union status group experiencing minimum wage violations, Program on Race, Ethnicity, and the Economy, Economic Analysis and Research Network (EARN), Valentines Day is Better on the West Coast (at Least for Restaurant Servers), Facts About Immigration and the U.S. Economy: Answers to Frequently Asked Questions, Early Childhood Poverty and Adult Attainment, Behavior and Health, Florida Minimum Wage History: 2000 to 2017, Raising the Minimum Wage Could Improve Public Health, At NC Department of Labor, Little Help for Unpaid Workers, An Epidemic of Wage Theft Is Costing Workers Hundreds of Millions of Dollars a Year, Mobility: Not Offsetting Growing Inequality, Rebuilding a Good Jobs Economy: A Blueprint for Recovery and Reform, Program on Race, Ethnicity, and the Economy PREE, Economic Analysis and Research Network EARN. To limit our sample to minimum-wage-eligible workers, we carefully account for all possible exemptions to the minimum wage portions of the FLSA and each states specific minimum wage exemptions. Wage theft is the failure to pay workers the full wages to which they are legally entitled. Share of workforce demographic experiencing minimum wage violations Consequently, the poverty rate among these workers would fall from 21.4 percent to 14.8 percent, and the overall poverty rate among the minimum-wage-eligible workforce would decline from 6.9 percent to 6.6 percent. Download image, Share of each citizenship status group experiencing minimum wage violations An Epidemic of Wage Theft Is Costing Workers Hundreds of Millions of Dollars a Year. Economic Policy Institute Issue Brief no. Employers found to have illegally underpaid an employee are usually required only to pay back a portion of the stolen wagesnot even the full amount owed, much less a penalty for violating the law (Galvin 2016a). For example, DOL estimates that 3 percent of seasonal amusement and recreational establishment workers are exempt.